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Week after week, it seems that Woolies is in the news for some gaffe, with this most recent one being a $1.2 million fine over the mishandling of employee leave.
Woolworths, by the looks of it doesn’t want to share the media limelight as it continues to be the talk of town, this time for a $1.2 million slip-up. According to The West Australian, the largest supermarket chain in the nation has been slapped with a $1.2 million fine after failing to pay Victorian employees their correct long-service leave entitlements.
Woolworths Group Limited and its subsidiary Woolstar pleaded guilty to a combined 1,227 charges of breaching the Long Service Leave Act. The company claimed that it was simply a “human error” that occurred when updating its payroll systems over an 18-month period beginning in 2014.
Woolies flagged and reported the issue to the regulator after it was discovered through an internal investigation. The court was told that 1,227 former employees were underpaid between $250 and $12,000, and there was a decision made not to lay charges for about 3,500 staff underpaid less than $250. In total, employees were underpaid more than $1 million.
The magistrate, Nahrain Warda, stated that these were serious offences: “The sentence must ensure a strong message is sent that the court regards the protection of the entitlements of employees, where there is a significant power imbalance, is paramount.”
This was described as a “systematic and widespread” failure by the supermarket giant, displaying a running theme for the corporation as a whole over the past few months. These mistakes, however, didn’t halter Woolworths’ overall business outcomes, as it increased its half-year profit to almost $1 billion.
Although these profits are substantial, the theoretical fine for this failure could’ve been in the realm of $10 billion, which would’ve somewhat stung the pockets of the supermarket giant.
“It’s expected they would and should have infallible systems in place. This is a gross failure on their part to ensure irregularities do not exist,” said Warda.
The theoretical fine wasn’t issued because the chain cooperated at every stage of the process. Warda said Woolworths had apologised to the affected employees and put a process in place to pay them back with interest and pleaded guilty at the earliest opportunity. Therefore, no conviction was recorded.
Coming off the back of Woolworths chief executive Brad Banducci being threatened with jail time after refusing to answer probability questions in relation to his salary, let’s just say the general public isn’t looking upon Woollies too kindly.
RELATED TERMS
An employee is a person who has signed a contract with a company to provide services in exchange for pay or benefits. Employees vary from other employees like contractors in that their employer has the legal authority to set their working conditions, hours, and working practises.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
